Malaysia’s Nam Cheong has substantially grown its business in the offshore vessel chartering segment, helping to offset its lack of shipbuilding revenues.
Once strictly a shipbuilder with a partly speculative order book, Nam Cheong turned to vessel chartering when the offshore market took a harsh downward turn. The company revealed in its latest set of financial reports that it had in fact reported no revenue against its shipbuilding business for the entire first half of 2019.
Helping to offset the shipbuilding drought, the company’s vessel chartering revenue grew 183% to MYR104.6m ($24.94m) on the back of higher utilisation rates and fleet expansion to 34 vessels, up from 23 vessels at the same time last year.
The growth helped the company post an operating profit of RM25m ($5.96m) for the half, down from RM591.4m last year.
Leong Seng Keat, CEO of Nam Cheong, commented: “Our performance for the first half of the year was buoyed by our robust chartering segment, with our expanded fleet size and upgraded capabilities powering us through the industry’s gradual recovery.”
Leong said the company plans further fleet expansion and diversification into the engineering, procurement, construction, installation and commissioning (EPCIC) segment as well as adding fabrication work to its shipbuilding capabilities.